Majority vows to push through ¢2b GAT sovereign guarantee

The Majority in Parliament
have served notice that they will use their numbers to push through
government’s request for a ¢2 billion sovereign guarantee for the Ghana
Amalgamated Trust (GAT).

The request is before the House’s Financial Committee for approval and Parliament is supposed to consider it on Wednesday.

GAT’s formation and debt
sale come in the closing stages of the banking sector cleanup during
which lenders had to raise their capital holdings, a process which cut
the number of banks by almost a third to 23.

Government created it as a special-purpose vehicle which will use a debt-sales-proceeds to purchase shares in five lenders and help them meet a minimum capital threshold of ¢400 million.

Government is to start a debt sale this month to prop up lenders as
authorities seek ¢2 billion ($403 million) in finance
for undercapitalised banks.

According to them, government’s decision to establish the GAT to help some local banks meet minimum capital is illegal.

James Klutse Avedzi is the Deputy Minority Leader

Deputy
Minority Leader, James Klutse Avedzi, says unless government properly
establishes the Trust by seeking parliamentary approval, they will not
back the request for a sovereign guarantee.

“We
have few issues that need to be clarified and the committee which is
still working on that is demanding number of documentations. First of
all, GAT is alien to Parliament and we don’t know what it is…is it a
company set up by who?

“Why
do you introduce a company that is alien to Parliament and bring it for
us to work and give it a sovereign guarantee to go and borrow money,”
he quizzed.

According to him, Article 192 of the Constitution requires that public entities can only be set up through an Act of Parliament.

Mr
Avedzi said the Minority won’t be concerned if GAT were a private
entity but for the fact that it is brought to Parliament for a sovereign
guarantee, the right thing must be done.

He disagreed completely with rectifying the bill for the House to move on to grant the request.

“Withdraw
this sovereign guarantee request and come back to Parliament with a
bill to establish GAT. We will pass it into an Act to establish the
company…but don’t pass by the backdoor,” he said.

Mr Avedzi said because the Majority have the numbers, they are bullying their way through when it comes to voting on issues.

“They
forget that there is tomorrow and they will not be in power
forever…another party will come into power to question sudden things
they are doing now. We can go to court and ask for the interpretation of
the law,” he said.